Resident expert Alan Wright describes what you can achieve when you know and track your most popular inventory items. It's far more than most managers would realize.
If you have a business you likely have inventory, and if you have inventory you must keep track of that inventory to ensure you have sufficient stock on hand. You also don't want to buildup a stockpile of any particular item that isn't selling well. Running out of popular items will cost you business, and buying items that you don't need costs you money. We're going to talk about how using inventory management software can help business owners take control of their inventory and prevent these common inventory problems
One problem that many businesses fall into is keeping too much inventory in general. They don't know which items are popular and which items are likely to sit in the warehouse. The solution most often employed is to simply over buy because being caught without an item is seen as worse than having too many of any item. The problems with this approach are many. Every dollar spent on inventory is taken out of working capital and items sitting in a warehouse aren't earning the business any money. Inventory that sits in a warehouse too long is subject to depreciation (eroding profits) or worse as they become useless over time (imagine having a stockpile of first generation iPhones, you're never going to recoup the cost of those now). Outdated items will then need to be liquidated by putting them on sale to regular customers or selling them on the discount wholesale market, either of these options will cut into your profits.
Knowing what items are popular and which items are less popular is vital information for the business owner. This is where an inventory management system like iMagic Inventory Software comes into play. Good quality inventory management software can track items by number of units sold, the price the items were sold, and even who is buying the items (if that information is collected at the time of sale). iMagic Inventory provides you with sales reports that include graphs to help you discover and track sales volume by item. It also has item tracking reports to help business owners keep track of their inventory on hand.
The concern that often leads to a buildup of items in your warehouse is the, very real, concern of making sure you always have enough of any item in stock. You never want your inventory of any item to be completely depleted before you reorder, and most businesses would consider this a great oversight. Businesses will usually set minimum reorder levels for each item in their inventory.
For instance, consider an item that you know will take three days to deliver after you place the order and you sell 30 units of that item each day. In this case you might set your minimum reorder level to 120 units, to ensure that you always have sufficient supply of that item.
If you are currently using spreadsheets or another manual process to track your inventory then you require a manual interaction for every item to get reordered. If the person tracking reorder levels misses an indicator or simply forgets to place an order, the business ends up without sufficient supply of a particular item. Inventory management software like iMagic Inventory allows you to set minimum reorder levels for each item, but goes further and automates the ordering process. When inventory levels fall below the minimum reorder level for a particular item iMagic will automatically place the reorder, ensuring your business never runs out of popular items.
Why not download a free trial version of iMagic Inventory Software right now and see how it can help you achieve a solid and reliable quoting system.